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There are six franchise in the state of Kentucky. Out of those six, one of them is currently paying 4 area fees with two more franchises hitting 4 fees this year. In 2010 two of those three franchises will go up to 5 fees.
My franchise, which I operate, in Vancouver, WA. is paying 4 fees as well.Cody,
I want to thank you for your quick response. What is the amount of revenue corporate is hoping to bring in with this increase and how did you come to this number? How will the funds be used and how will this increase benefit our operators in the near and distant futures? My first recommendation would be to try a 25% ($20 more per area) royalty fee increase to start. My other recommendation would be to put into effect some kind of an “under-performance” fee increase. This would be for those operators who are not utilizing their areas to their full potential. Maybe for these under performers a doubling of their area fees would be sufficient. Obviously standards would have to be set. This is something, I feel, should be done only at the time of contract renewal. By going after the under performers you don’t punish franchises that are doing well and making us all money.
Does anyone else have suggestions?Brian,
I appreciate your positive attitude and willingness to move forward and grow your business. However, you said it won’t be a problem for you to come up with an extra $80 a month for the first year and then another $80 for the second. All of my operators in Kentucky have 3 on up to 11 area fees. For these operators it wont be easy to come up with these extra costs. Especially in a struggling economy.I think everyone of us in this business understands that it requires money and advertising to grow our company, but to enforce such an astronomical increase is not only reckless, but could be devastating to many franchises who are already feeling the pressures of this struggling economy.
I’m also curious to know how many franchises participated in the Franchise 50 business review survey? Is it half, 75%?? Unless 100% of our franchises participated the numbers Cody gave us are not completely accurate.
I too, Like Greg, will most likely loose most of my franchises in Kentucky if this is put into play. My strongest franchise earns $8000 a month in the summer – for Kentucky, that is a pretty good income. This franchise has 4 area fees. If we were to double his fees, that would be 8% of his income during the summer and a much, much higher % in the winter, being paid out by him. That’s worse than our competitors even in his good months. There is no way he will stay with the franchise. This will shut down franchises and decimate some states. My investment in Kentucky would be a huge loss.
One more thought. Even tough I think the timing and content of this proposal is all wrong, I really want to believe that this money would be for a national advertising campaign. Cody, as an investor/state owner in this business, I want to see some kind of a plan to justify these increases. Show us the plan.
I want to apologize for not being able to attend the phone meeting tonight but because I am an operator, as well as a state owner, and I was on a job cleaning carpets. That is what this business is all about? Right?
I want to thank the state owners who called me shortly after the meeting to inform me of the bomb that was dropped tonight. I have to say I am completely dumbfounded by this idea of raising the “royalty fees”. This make no sense in our current economic climate!!! If you want to call it a national advertising campaign fine, but to make it a 100% increase in area fees over the next two years? I’m sorry but that’s ridiculous, completely ridiculous. To compare Heaven’s Best to Chem-dry or Stanley’s is a bad comparison. Both of those companies are household names. We are not!!! Also to use this as a way to squeeze operators into selling off their territories, in my opinion, is not right. State owners are the ones who sold these large areas, usually for a higher than normal price, and for corporate to now step in and force increases is not only unfair but an outright violation of trust to all operators.
I have to say I am very concerned and have a lot of questions. Is M-co in financial trouble? Is Cody looking to sell within the next few years, by increasing fees and showing a stronger positive cash flow? Is Cody willing to take a loss in franchise numbers to make a monthly financial gain, again showing a positive cash flow? Crunch these numbers. At the end of 2007 we had 1226 licensed territories. If half of those were to go away that would leave 613 territories. 613 x $80 = $49,040.00 to corporate a month. Is this move to try and eliminate franchises who aren’t performing to expectation, and open up areas to re-sell? I really don’t understand why would we raise fees in a U.S. economy at a 30 yr. record low? All of my franchises are struggling as it is. By implementing this idea it is a sure fire way to push my already struggling franchise deeper into trouble. THIS IS UNFAIR TO OPERATORS AND A BAD IDEA!!!
Does anyone else have an an opinion?
I did Val-Pak a few years ago and was disappointed. It seemed to me like it brought in clients more concerned about price rather than quality. Not the customer base I’m looking for.
Evan,
It sounds like she probably did. I should expand (I cant believe I left this out) on my previous post. It’s a good idea to always rinse and flush the stain before doing a red dye removal also. That usually will eliminate whatever they put on it.Did the customer try to clean it themselves first? Some over the counter cleaning products can react with our red dye remover to cause browning or even greening. Sometimes flushing it out with water after the first red dye treatment and repeating the process over again can cause it to lighten up more. Sometimes there’s no fixing it.
Gary,
I didn’t mean that a dual process is not effective. It takes a long time for not much better of a result in my opinion. Time is money. If you use it and it’s working for you than keep it up.Ron,
I will be in Salt Lake for the meeting. Definitely bring the postcard. I’ve already got the ball rolling on putting your idea into affect in my franchise.I understand “nuke”. I do it to my leftovers every day for lunch 😀 . I wasn’t sure if you meant actually putting the 101 in the microwave or what. I forgot to mention that we usually fill our jugs with hot water because it does increase the strength of the cleaner.
Dave you should talk to that nuclear plant about developing a nuke powered buffer and sprayer. Then we could change our slogan to “Cant stand the dirt and stains in your carpet? Want to get rid of it once and for all? Let us nuke em clean!”Dave,
I don’t know what “nuking” the 101 would do, but using hot water in your sprayer jugs does increase the strength of the over all cleaning solution.Gordon hit it right on the head earlier in this post. A dual process is not our regular process. If you get the account and don’t always use the dual process…. you will probably have to kiss it goodbye because someone will call you on it. If you are going to always use the dual process than expect the job to take twice as long and because of that, also be less efficient/profitable. Don’t buy in to the dual process hype. I’ve used it, with a ninja that has heat, and it takes a long time. You will get similar results with our regular process using a boosted up mix or pre-spraying fast acting enzyme before hand. Just my two cents!
